What is causing sharp creases on subdivided model?
The sharp crease there is caused by a set of duplicate vertices. To fix it you just need to select all the vertices (A) and Remove Doubles (CtrlV, Remove Doubles).
Those sharp edges are occurring because of your edge split modifier. Remove it to get a smoother look. I also recommend adding in another support loop on the right side of the gap in order to get better smoothing, like so.





To solve this you need to add more loops towards the bottom (CtrlR), and move all of the loops at the bottom up a little bit. I recommend putting loops next to the points on the main phone where it transitions from the curves of the corner to the straightaway. After you've added the loops, select them one at a time and move them up along the Z axis so that the limit surface of the subdivision surface modifier just touches the bottom of the phone. You can use the Shift key during the grab to move the points more slowly and position them more precisely. Here's the result I get from doing that:




In addition you should probably set the screen part of the phone to be shaded smooth before you put together the final render. In Edit mode, select everything and then use CtrlF, Shade Smooth to get the smooth shading you probably want to have for the final render.